Protect your Assets through Bankruptcy

It is a question we hear every day – “If I file for bankruptcy, will I lose my property?” Many people who are faced with difficult financial situations worry that going through a bankruptcy means that they will have to lose their house, their car, or other assets. This is a common worry – with an easy solution! Bankruptcy allows you to protect most of (not all of) your assets, like your home, car, etc., while completely eliminating or bringing your debt down to a manageable level.

The bankruptcy code is set up to make bankruptcy a viable and usable tool for people who have run out of options regarding their debts – and in many cases, we see people who have liquidated many of their assets in an attempt to settle or pay down their debt unsuccessfully. Filing for bankruptcy can help relieve the debt strain without requiring total liquidation of your assets.

So how does it work? Bankruptcy laws allow for certain exemptions, where you are allowed to “exempt” assets from liquidation during a bankruptcy. While exemption limits vary by state, a large percentage of bankruptcy filers are able to file the bankruptcy they need, while retaining the assets that are important to them – houses, cars, retirement accounts, etc.

Exemptions are not unlimited, and different limits apply to different types of property – but generally speaking, most people who file a bankruptcy are able to walk away still owning what they did prior to their bankruptcy filing – losing nothing but most (or all) of their debt. In fact, less than 1% of people who file for bankruptcy have any issues regarding their real estate.

As exemptions can vary based on your specific, unique circumstances, consult a bankruptcy attorney to find out exactly what your bankruptcy case would look like, and how you can best protect your assets. Filing for bankruptcy can oftentimes save you from having to sell or liquidate many of your assets – including retirement accounts – while still getting rid of much of your debt, leaving you in a manageable financial state on the other side.

If your debt has gotten to the point that it is not manageable – and your budget simply does not allow for payment of debts after your living expenses are met – bankruptcy can be a viable solution to getting your financial health back under control. Filing for bankruptcy does not mean that you will lose your assets – in fact, a bankruptcy filing can help to protect them! If you are faced with these types of difficult decisions and questions, be sure to consult your local bankruptcy attorney for sound legal advice. If you live in Southeast Michigan, you can contact the Bohikian Law at 810-494-7172 for a free consultation to go over your unique financial circumstances and how they can be resolved.